MF portfolio doctor: Parekh can achieve money goals if he hikes SIPs by 5% yearly

Not many investors know whether they have invested in the right funds and if their fund portfolio is on track. The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals and, if required, recommends corrective measures. The advice given is based on the performance of the funds, the risk profile of the investor as well as his financial goals.

Case I: Nilesh Parekh is saving for his children’s goals and retirement. Here’s what the doctor advised him:
Goals

Portfolio check-up

• Investing in a mix of equity schemes for past 3-4 years.
• Holds too many funds. Needs to consolidate portfolio.
• Goals are long term so can invest more in equity funds.
• Targets are high but can be reached if SIPs are increased by 5% every year.
• Retirement goal too low at Rs 30,000 per month. Increased to Rs 60,000 a month.

Investment portfolio

Note from the doctor

• Keep inflation in mind when setting targets of long-term goals.
• Don’t invest too much in low yielding debt instruments.
• Review investments and rebalance at least once in a year.
• Reduce risk when goal is near so that you don’t miss the target.

Case II: Funds are good but must restart SIPs
Gaurav Gupta is saving for his kids’ goals and retirement. Here’s what the doctor has advised him:
Goals

Portfolio check-up

• Invests in a few well chosen funds, including those with global stocks.
• Child goals on track but defer retirement by five years.
• Retirement goal of Rs 30,000 a month is low. Hike to Rs 50,000.
• Review mutual fund portfolio at least once a year. Change if any fund’s performance slips.
• Reduce risk when goal is near so that you don’t miss the target.

Investment portfolio

Assumptions used in the calculations
Inflation
Education expenses: 10%
For all other goals: 7%

Returns
Equity funds: 12%
Debt options: 8%

(Portfolios analysed by Raj Khosla, Managing Director and Founder, MyMoneyMantra)

Write to us for help
If you want your portfolio examined, write to etwealth@timesgroup.com with “Portfolio Doctor” as the subject. Mention the following information:
Names of the funds you hold.
Current value of the investment.
If you have SIPs running in any of them.
The financial goals for which you invested.
How much you need for each financial goal.